Cotati City Council
Agenda Staff Report
Item type: CONSENT CALENDAR (ACTION)
To: City Council
Subject: Resolution of intent to approve the Preliminary Engineer's Report for the Landscape and Lighting Assessment District, levy and collect annual assessments, and set the time and date of the Public Hearing for the Cotati Landscaping and Lighting Assessment District for Fiscal Year 2023/24.
Date: May 23, 2023
Written by: Craig Scott, Director of Public Works/City Engineer Recommendation
It is recommended that the City Council of the City of Cotati adopt a resolution of intent to levy and collect annual assessments, approve the Preliminary Engineer's Report and set the time and date of the Public Hearing for the City of Cotati Landscaping and Lighting Assessment District for Fiscal Year 2023/24.
Background
The ten original Cotati Landscaping and Lighting Assessment Districts (“Districts”) were initially formed by the City from 1989 to 2003 in accordance with the Landscaping and Lighting Act of 1972 (“Landscaping and Lighting Act”) to pay for costs associated with maintaining landscaping and streetlights within developments. To simplify the process and reduce administration costs, the 2017 proceedings combined the ten Districts into one District with ten separate “Zones.” A Preliminary Engineer’s Report has been prepared for the District, detailing work done and individual budgets for each of the ten Zones. The Engineer’s Report is to be considered for acceptance and a date is to be set for the Public Hearing for the levying of the assessments.
Analysis/Discussion
The Landscaping and Lighting Act requires that the City undertake certain proceedings for any fiscal year in which assessments are to be levied and collected. On January 24, 2023, the City Council began the required annual proceedings for the 2023-24 Fiscal Year by appointing the City Engineer as Engineer of Work and directed the preparation of the Engineer’s Report. The Engineer’s Report has been prepared and filed in accordance with the Landscape and Lighting Act and is being presented to the City Council for their consideration.
This is the second of three City Council meetings regarding annual review of the assessment district. Currently, the Council typically adopts a Resolution of Intent to levy and collect assessments and preliminary approval of the Engineer’s Report. At the third and final meeting, the Council will conduct a public hearing and may then authorize the levying and collection of assessments for FY 2023-24. At that time, the assessments cannot be increased above those stated in the Resolutions of Intent and the preliminary Engineer’s Report.
The date of the required public hearing is proposed to be June 27, 2023.
Preliminary Engineer’s Report
The Preliminary Engineer’s Report begins with a background and summary of the proposed assessments for FY 2023-24 and is followed by separate sections describing each Zone, what services are included for each Zone, including capital projects (i.e., major repairs, re-plantings, or other improvements), the estimated costs for FY 2023-24, the allocation of the assessment to the lots, and an estimate of each Zone’s reserve fund balance. Following these sections, the report has attachments; Attachment A describing the method of apportionment of the assessments, and Attachment B with a description of which properties are within each zone and the zone diagrams.
For this past year, all Zones received routine maintenance, there may be replanting and repairs in other zones once City staff has evaluated the landscaping conditions and priorities as well as budgets in each of the ten zones. Zones 2, 4 and 5 have annual per lot assessments of $40.00, $32.00, and $36.00 which are very low and cover utilities, minimal labor, and administrative cost.
These zones continue to be a challenge financially as the City cannot increase the annual assessment without a majority approval of residents within the zone. However, without a significant improvement in the service, which is not possible, it is very unlikely that the residents would vote for an increase. Therefore, staff will inform the residents of the project completed by the city and the negative operating costs for their districts, but unless there is an unexpected groundswell of support for raising the assessment, staff considers these areas city-maintained streetscapes with a partial offset of costs by an assessment. While not ideal, it’s better than no cost offset.
Annual assessments are at a fixed maximum amount for all the zones except zones 7, 8, 9, and
10. These zones have an annual inflation factor, equal to the Construction Cost Index (CCI) for the City of San Francisco. The CCI for FY 22-23 is 8.37 percent. Due to the abnormally high year over year CCI increase, increased discretion was used in determining the rate adjustments and the result was a 5.0 percent increase for Zones 7 and 10, and an 8.2 percent increase for Zones 8 and 9. These increases reflect the projected expenses, outstanding loans, and reserve balances as presented in the respective sections of the report.
Financial Considerations
All costs associated with these annual proceedings and the annual operation, maintenance and administration of the Landscaping and Lighting Maintenance Assessment District are intended to be recovered from the annual assessments levied on the properties within the District. It may be necessary to have a loan from the City’s General Fund if improvements or repairs become necessary, but it is the intent that these borrowed funds be paid back through zone revenue over time.
For Zones 1, 2, 3, 4, 5, and 6,annual assessments are to remain at previous year’s levels ($158.00, $40.00, $290.00 [$435.00 for triplex], $32.00, $36.74, and $133.50, respectively).
The maximum assessments for Zones 7, 8, 9 and 10 are proposed to be increased by the ratio of the January 2023 Construction Cost Index for San Francisco to the CCI for the closest month to when those Zones were formed (consistent with provisions in the resolutions forming those respective Zones) and multiplied by the original assessment. As such, Zone 7 assessment is proposed to increase from $241.00 to $253.05. The Zone 8 assessment is proposed to increase from $487.50 to $527.48. The Zone 9 assessment is proposed to increase from $190.00 to $205.58. The Zone 10 assessment is proposed to increase from $366.00 to $385.00.
Environmental Issues
The action of approving the preliminary annual engineer’s report, declaring the City’s intention to levy the annual assessment, and scheduling a public hearing for the levying and collection of assessments for the Cotati Landscape and Lighting Maintenance District does not constitute a project as defined by California Environmental Quality Act Guidelines Section 15378; therefore, no further environmental review is required.